[pagebreak:Startups Undeterred Despite Weak Economy]

Hyperion Power Generation, Wattbot and Planar Energy Devices were among the startups seeking funding at the Dow Jones Alternative Energy Innovations conference in Redwood City, Calif. this week.

Some companies at the conference said fund raising was going slower than usual (see Funding Roundup: Closing Deals in Tough Times).

But according to a survey released Tuesday by law firm DPA Piper, technology executives believe clean technology will be a "bright area" amid the economic turmoil because it helps to address higher fuel costs and energy supply challenges.

The survey also found that venture capitalists are more optimistic than the rest of the technology industry about the extent of the financial crisis, with only about half saying they expect it will be as severe as the "tech bubble burst" of 2000, compared with two-thirds of tech executives.

Here are a few of the startups that hope to translate that optimism into cold cash to grow their companies:

Page 2: Hyperion Power Generation

Page 3: Wattbot

Page 4: Planar Energy Devices

[pagebreak:Hyperion: Continued]

Hyperion Power Generation:

Hyperion Power Generation wants to go nuclear in a small way.

The Santa Fe, N.M.-based company has shrunk the nuclear reactor into a 25-megawatt package, intended for commercial applications, that's small enough to fit in the back of a truck.

"This has the opportunity to change the energy [market,]" CEO John R. Deal said. "The idea is to take the power of nuclear energy in places it was unable to go before."

Deal, who presented at the conference Tuesday, said the company is raising an undisclosed sum in a second round of funding and told Greentech Media he expects to close the round in January "or a little after."

Altira Group LLC in April announced it had invested in Hyperion's first round of funding. The amount of that round was also undisclosed, but Deal said the company is "certainly well-funded" from the Series A.

So why the new round?

"Part of the reason is to get more brains involved," he said. "It turns out to get the attention financial geniuses you have to let them invest. It's the opposite of paying them; they pay you."

All together, the company expects it will need a total of less than $60 million in capital to enter the market, he said.

The company plans to sell $25 million reactors that can each power the equivalent of 20,000 average homes for eight to 10 years for about 2.5 cents per kilowatt-hour, said Deal, whose business card includes the nickname "Grizz."

The reactors produce heat that is used to run a boiler that makes steam, which is converted into electricity. It doesn't require any water or separate cooling system, so that a Hyperion power plant would use the same amount of water as any other steam-turbine plant, he said.

And Hyperion already has had plenty of customer inquiries - including some from companies running big data centers - and believes it has an addressable potential market of $750 billion, Deal said.

"We hit the market in just over four years and we're completely backlogged with orders," he said.

The company expects to deliver a reactor to its first customer in June of 2013, he said.

Much of the interest is driven by the cost. Compared with the cost of heavy oil, at $10 to $15 per million British thermal units of energy, Hyperion expects the cost to its customers to be $3 per million Btu, Deal said. 

The company also plans to take responsibility for the entire fuel cycle, including managing the waste and recycling of the uranium, he said, adding that after eight to 10 years, the waste from the reactor would be about the size of a softball.

The technology, developed by more than 30 scientists in the national labs, uses uranium hydride, which Deal said is chemically unable to have a meltdown, as it stays at its optimal temperature without any external moderation or controls. 

"There's nothing to break down or to maintain," he said.

Still, at the end of his presentation, Deal ended up fielding plenty of questions about the safety of distributing nuclear power. 

First of all, it would be difficult for anyone to get into the reactor because it would be hot and would stay hot for about six months, he said.

The uranium also would be useless for making a bomb, he said. "You'd be better off starting with yellow cake from Niger," he said. "This was designed by the nonproliferation team at Los Alamos, so this is proliferation proof."

If someone did manage to break open the reactor – and that would take a very large charge, he said – it would expel radiation, but the radiation would be very limited to that area, he said.

"If someone blew up a natural gas plant, it would be a lot bigger deal," he said.

[pagebreak:Wattbot: Continued]


If residents took a hard look at the numbers, far more of them would install new energy-efficiency and renewable-energy technologies.

At least that’s the idea behind Wattbot, a San Francisco startup founded in July of last year.

The company is launching a Website that will calculate the most financially sensible technologies for residential customers to adopt, depending on their specific location and property and user characteristics, including their appliances and their goals, CEO Kurt Brown said. It will take into account the full range of available energy-efficiency and renewable-energy technologies and services, he said.

The idea is that residential products already exist that would benefit "a whole bunch of people" who haven’t signed on for them yet, he said. "Why haven’t they? In our view, there’s an information gap."

For example, compact fluorescent bulbs make a financial payback for nearly everyone. "The most sensible thing to do is to smash every incandescent bulb in your house now," and not to even wait until they burn out, he said, adding that most people haven’t done the math and realized that.  

The company, which raised a $350,000 seed round in December, is now seeking $3 million to $5 million in its first round of funding, he said. Wattbot hopes to get term sheets in December and close the round in January. 

Last week, Wattbot opened to technology providers, giving them a chance to set up their profiles and also signing up consumers – about 300 so far – for an early beta launch, Brown said.

The company plans to take its site live for its real consumer launch in January, rolling out services starting in California and New York and aiming to cover all the major metropolitan areas in North America in "a year or so," he said.

Essentially, Wattbot hopes to show mainstream customers the bottom line of investing in greening their homes and to raise the number of North American homes – now less than 0.5 percent, according to the Website – that deploy these technologies and services.

"People who are buying now bought the Prius," he said, speaking of early adopters. "But it’s really all about a mainstream market, and that responds to much more concrete things, such as money. We’re looking beyond the niche. ... We’re giving them the confidence to make that decision. We’re trying to convince them it’s really worth it to do something."

The site will generate a free list of recommendations intended to deliver the best bang for the residents’ buck, along with a clear estimate of both the upfront cost and the monthly savings expected from the recommended projects.

It will also calculate different financing options, including the cash flow and total cost that would result from using them as well as a supply a list of potential providers, Brown said.

He added that Wattbot is "fanatically unbiased" in its lists of technology providers and doesn’t plan to offer higher placement to sponsors, for example. It will simply connect users to the best-matching providers that meet the criteria of the projects and the site - they must be licensed, for example, registered with the Better Business Bureau and provide the services required by the project.

That list won’t rank companies based on "subjective" quality ratings, he said.

But the site also will have a place for online reviews and will have a community feature to help residents connect and share opinions, recommendations and experiences regarding different companies and projects, he said. 

"Our whole point is to get people comfortable with the buying decision and to give people all the information they need to make buying decisions," he said. 

The company then plans to sell leads about these customers and projects to technology providers, charging between $20 and $200 per lead, depending on the probability of closing the deal, Brown said.

That probability score – ranked from 1 to 5 – will be calculated based on such indicators as the amount of time the potential customers have spent calculating and considering the project on the site, the level of detail they have disclosed and the number of companies competing for the project, he said.

When a company buys a lead, it will get the whole dossier Wattbot has on the project so it doesn’t have to rehash the same information again with the customer, he said.

Finally, the company plans to provide market research using the data it accumulates about residential demand.

In five years, Wattbot expects to bring in revenue of about $30 million from vendors and about $25 million from market intelligence, Brown said.

[pagebreak:Planar: Continued]

Planar Energy Devices:

Compared to other batteries, lithium-ions pack a punch. They deliver about twice the energy density (or energy for their size and weight) of nickel-cadmium batteries, for example.

But packing so much energy in a smaller space has brought some challenges, namely what’s called "thermal runaway," or batteries overheating and, in some cases, catching fire

Planar Energy Devices is developing thin-film lithium-ion batteries that it claims can provide higher energy density at a lower cost than competing batteries - without the threat of thermal runaway. 

Lithium-ion "has the highest potential capacity of any of the materials in use today, but the design has been going in the wrong direction," CEO Scott Faris said in a presentation Tuesday.

Planar hopes to change that direction. First of all, it is developing "solid state" batteries, meaning they include no moving parts and are made up of semiconductor materials. That’s compared to current battery chemistries that "really have become living devices" that change in an unpredictable manner, Faris said.

The Orlando, Fla.-based company also has developed a separator that encapsulates electrolytes – the combustible part of the battery – when they reach high temperatures that could damage the battery, according to its Website.

Finally, Planar plans to make the batteries cheaper to manufacture by using a "roll-to-roll" process similar to what semiconductor and thin-film solar companies are developing, Faris said.

He claims Planar can deposit semiconductor materials very quickly by literally spray-painting them on, and said the capital expenses of building a manufacturing plant also would be far less than that of a typical battery factory – partly because the company plans to retrofit old semiconductor lines.

"This is a highly automated, cost-effective manufacturing system," he said. "For everyone else who looks at a battery, manufacturing is usually the last thing to be considered. ... Our perspective is that this is a printing process."

Of course, thin-film solar companies have found it more challenging than expected to make thin films cost-effectively at high volumes. Cadmium-telluride company First Solar is one of only a handful of companies that have successfully produced significant amounts of the films so far, although many other companies expect to reach the market soon.

Faris said he’s confident Planar will be able to avoid those manufacturing problems because it is leveraging knowledge, not only from solar, but also from electrochromics - materials that change color when energy or an electric charge is applied, such as windows or mirrors that automatically tint in different lighting conditions - and from flat-panel displays. 

"My view is it’s always attractive to a second-generation player in any market," he said. "There’s a lot of knowledge [in those other applications]. We can learn from that."

The company is now seeking $12 million in its second round of funding, which it expects to close in the first quarter of next year, Faris said. Planar later plans to raise $20 million in its third – and last expected – round of funding in the fourth quarter of 2010.

Planar, a National Renewable Energy Laboratory spinoff, launched in July of last year and raised $4 million in its first round of funding from Battelle Ventures last October (see Can Thinner Batteries be Better?).

The company plans to initially target military and low-power wireless applications, such as smart cards, and to bring it its first revenues in 2009, Faris said. 

It plans to reach high-volume sales in 2012, when it also plans to begin licensing its technology, he said. Planar also plans to expand into transportation and networking devices.

Planar has taken grid-scale batteries off its plate, at least for now, he said. "We have enough on our plate right now," he said after the presentation.

Last year, an investor told Greentech Media that Planar expected energy storage for renewable power, like wind and solar, tobe a key market.

Still, the battery could eventually extend into any application, from a technological point of view, Faris said. "It’s a matter of resource allocation and, most importantly, where the accepting markets are going to be."